LONDON (ICIS)--Yara International has agreed to acquire a 60% stake in Brazil-based privately held fertilizer company Galvani Industrial, Comercio e Servicos for an enterprise value of $318m, the Norwegian major said on Tuesday.
Galvani is engaged in phosphate mining, single super phosphate (SSP) production and the distribution of fertilizers in central and northeast Brazil and also owns licenses for two new greenfield phosphate mine projects in the country.
The acquisition follows Yara’s purchase of Bunge's Brazilian fertilizer operations in 2013 and is in line with the group’s strategy for growth in Latin America, it said.
“This acquisition represents another significant step in realizing our Latin American growth strategy, further establishing our position in Brazil as a long-term industry player, committed to developing and investing in Brazilian agribusiness,” said Yara’s president and CEO Jorgen Ole Haslestad.
“The Galvani acquisition will help secure phosphate fertilizer capacity in the center of the country and in the attractive and fast growing agri-frontiers of Brazil. Furthermore Galvani brings excellent industry competence with cost-effective solutions for mining, production, blending and warehousing facilities,” Haslestad added.
Galvani has a total SSP production capacity of approximately 1m/year tonnes at the Paulinia and Luis Eduardo Magalhaes industrial complexes, which source phosphate rock from Galvani’s Lagamar and Angico dos Dias mines and leased mine Irece.
Galvani has two greenfield and one brownfield mining project under development to cover future phosphate rock demand. These include Salitre (greenfield) which produces up to 1,200,000 tonnes/year of phosphate rock: Angico (brownfield) - around 150,000 tonnes/year of phosphate rock: and Santa Quiteria (greenfield) - around 800,000 tonnes/year of phosphate rock.
The projects under development also include new upgrading capacity for phosphate fertilizer and are expected to start production between 3 and 5 years from closing date.
The acquisition is subject to the approval of Brazilian competition authorities (CADE) and other customary approvals and is expected to close in Q4 2014, Yara said.